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Many Arizona homeowners are surprised to discovery that Arizona law does allow a homeowners’ association to foreclose on a lien against a homeowner in certain situations. This is not true in every state and was not the case in Arizona until fairly recent amendments to the Arizona Revised Statutes. In order to avoid losing your home to your homeowners’ association, you should understand what rights and obligations you have.

Fortunately, Arizona law does not allow a homeowners’ association to foreclose against a homeowner for unpaid fines. Instead, the law distinguishes between assessments and fines, allowing for foreclosure actions based on liens for unpaid assessments, but not fines.

Assessments are defined as the regular dues that a homeowners’ association charges to maintain the community. If a homeowner fails to pay such assessments, and if the assessments remain unpaid for one year or the unpaid amount exceeds $1,200, the HOA will have a lien on the home that can be foreclosed on. Under Arizona law, an HOA’s lien for unpaid assessments attaches automatically, and many homeowners don’t realize until its too late just how much trouble can result from their failure to pay.

Fines, as opposed to assessments, are the penalties that HOA’s charge for violations of the homeowners’ association’s CC&R’s or other governing documents. Common fines stem from a failure to maintain landscaping, leaving trash cans outside, and parking in prohibited areas. Unpaid fines do not result in an automatic lien and require that the HOA sue the homeowner in court and obtain a judgment before the lien can be recorded. Even after obtaining such a judgment and recording a lien, however, the HOA cannot seek to foreclose on the home for unpaid fines.

Notwithstanding the homeowners’ association’s right to foreclose on a lien for assessments it often doesn’t make sense for the HOA to proceed with such an action. Although HOA liens have priority over many obligations, such liens will generally be secondary to the primary mortgage on the home, so if there is not sufficient equity to pay off the mortgage and satisfy the lien, foreclosure may not be warranted. Homeowners should understand, however, that failing to pay assessments may result in the loss of their home, and that HOA’s may pursue foreclosure even when such an action is not financially merited.

The statutes governing the rights and obligations of homeowners and HOA’s are complicated, and homeowners facing collection action by their HOA should contact an experienced Arizona HOA lawyer as soon as possible. In many cases there are merited defenses, but they must be advanced before an adverse decision in rendered by a court.